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Anti-Money Laundering Requirements Enhanced

21 June 2024

The requirements under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (“the Act”) have been enhanced with the gazetting of the following subsidiary legislation, both of which came into operation on 15 June 2024: 
P.U.(A) 158/2024
 
Amendment of the First Schedule
 
P.U.(A) 158/2024 amends Part I of the First Schedule of the Act in the following respects:
 
1. A new paragraph (d) is added to paragraph 4 by expanding the definition of a ‘reporting institution’ to include the activity of ‘advising on corporate finance’ by a holder of a licence under the Capital Markets and Services Act 2007.
 
2.
A new paragraph 24A is added to expanding the definition of a ‘reporting institution’ to include the activities of dealing in precious metals or precious stones carried on by: 
  1. businesses registered under the Business Names Ordinance of Sarawak (Chapter 64) and licensed under the Business, Professions and Trades Licensing Ordinance of Sarawak (Chapter 33); 

  2. businesses licensed under the Trade Licensing Ordinance of Sabah (Chapter 144); and 

  3. limited liability partnerships registered under the Limited Liability Partnership Act 2012 [Act 743]. 
P.U.(A) 158/2024 also amends Part II of the First Schedule of the Act by replacing the phrase “[a]ctivities carried out by a Labuan financial institution as defined in the Labuan Financial Services Authority Act 1996 [Act 545]” with the following three paragraphs:   
 
3. Activities carried out by:
  1. a Labuan bank carrying on the business of:
  1. receiving deposits on current account, deposit account, savings account or any other account as may be specified by the Labuan Financial Services Authority;
  2. Labuan investment banking excluding building credit business, credit token business and factoring business;
  3. Labuan financial business relating to development finance business, leasing business, money-broking business, Islamic development finance business, Islamic leasing business or Islamic money-broking business;
  4. Labuan Islamic banking excluding Islamic building credit business, Islamic credit token business and Islamic factoring business;
  1. a Labuan investment bank carrying on the business of:
  1. providing credit facilities;
  2. consultancy and advisory services relating to corporate and investment matters including dealing in securities or making and managing investments on behalf of any person;
  3. undertaking foreign exchange transactions, interest rate swaps, dealings in derivative instruments or derivative financial instruments or any other similar risk management activities;
  4. Labuan Islamic investment banking excluding Islamic building credit business, Islamic credit token business and Islamic factoring business;
  5. Labuan financial business relating to the development finance business, leasing business, money-broking business, Islamic development finance business, Islamic leasing business or Islamic money-broking business;
  1. a Labuan licensed institution carrying on Labuan financial business relating to development finance business, leasing business, money-broking business, Islamic development finance business, Islamic leasing business or Islamic money-broking business; 

  2. a Labuan insurer and reinsurer carrying on life insurance business or life reinsurance business; 

  3. a Labuan insurer carrying on captive life insurance or captive life reinsurance business; 

  4. a Labuan insurance broker in relation to life insurance or life reinsurance business; 

  5. a fund manager of a public fund; 

  6. a securities licensee; 

  7. a Labuan trust company; and 

  8. a Labuan managed trust company, 
      as defined or provided under the Labuan Financial Services and Securities Act 2010 [Act 704].
4.
Activities carried out by: 
  1. a Labuan Islamic bank carrying on the business of:
  1. receiving deposits on current account, deposit account, savings account or any other account in compliance with Syariah principles as may be specified by the Labuan Financial Services Authority;
  2. Labuan Islamic investment banking excluding Islamic building credit business, Islamic credit token business and Islamic factoring business;
  3. Labuan Islamic financial business relating to Islamic development finance business, Islamic leasing business or Islamic money-broking business;
  1. a Labuan Islamic investment bank carrying on the business of:
  1. providing financing facilities in compliance with Syariah principles;
  2. consultancy and advisory services relating to corporate and investment matters including dealing in securities or making and managing investments, on behalf of any person, in compliance with Syariah principles;
  3. undertaking foreign exchange transactions, profit rate swaps, dealings in Islamic derivative instruments or Islamic derivative financial instruments which are in compliance with Syariah principles or any other similar risk management activities;
  4. Labuan Islamic financial relating to Islamic development finance business, Islamic leasing business or Islamic money-broking business;
  1. a Labuan Islamic licensed institution carrying on Labuan Islamic financial business relating to Islamic development finance business, Islamic leasing business or Islamic money-broking business; 

  2. a Labuan takaful and retakaful operator carrying on family takaful or family retakaful business; 

  3. a Labuan takaful and retakaful operator carrying on captive family takaful or family retakaful business; 

  4. a Labuan takaful broker in relation to family takaful or family retakaful business; 

  5. a fund manager of an Islamic public fund; and 

  6. an Islamic securities licensee, 
      as defined or provided under the Labuan Islamic Financial Services and Securities Act 2010 [Act 705].
5. Activities carried out by an exchange approved under section 134 of the Labuan Financial Services and Securities Act 2010 [Act 704].
 
Amendment of the Second Schedule
 
6. The following have been introduced as additional “serious offences” under the Second Schedule:

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7. The following provisions in the Second Schedule have been amended:

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P.U.(A) 159/2024
 
The reporting obligations under Part IV (sections 13 to 28) of the Act have been invoked on any reporting institution carrying out any activity specified in:
 
1.      Paragraph 4(d) of the First Schedule of the Act (see paragraph 1 above);     
 
2.     Paragraph 24A of the First Schedule of the Act (see paragraph 2 above); and
 
3.     Part II of the First Schedule of the Act (see paragraphs 3 to 5 above).
 
Alert by Lim Koon Huan (Partner) and Manshan Singh (Partner) of the White Collar Crimes Practice of Skrine.
 

This alert contains general information only. It does not constitute legal advice nor an expression of legal opinion and should not be relied upon as such. For further information, kindly contact skrine@skrine.com.

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